GE Capital Will Take Over A Xerox Financing Business

Published: September 12, 2001

STAMFORD, Conn., Sept. 11—
The Xerox Corporation said today that GE Capital had agreed to take over its United States equipment-financing business, removing as much as $10 billion in debt from Xerox's balance sheet over time.

Customer financing and administration will be run through a joint venture that will be 81 percent owned by GE Capital, Xerox said in a statement. GE Capital agreed to provide Xerox with about $1 billion in secured financing, Xerox said.

Xerox said in October that it would switch to third-party financing to reduce debt by as much as $11 billion as part of a plan to return to profitability by the end of the year.

The company leases 75 percent of the equipment it makes, and about 65 percent of Xerox debt comes from its financing business. The venture will be jointly managed and it will be based in Rochester. Most of Xerox's customer administration employees are in Rochester, Chicago, Dallas, and St. Petersburg, Fla., and will move to the new offices on Jan. 2.

In January, GE Capital provided Xerox with $435 million in financing backed by British equipment leases and in April, Xerox sold $370 million of its Scandinavian lease receivables. The $1 billion in financing from today's agreement will provide interim source financing for customers for the remainder of the year, Xerox said.

Bill McKee, a Xerox spokesman, said the company had canceled a conference call planned for this morning to discuss the agreement with GE Capital because of the attacks on the World Trade Center and the Pentagon.